The S&P 500 bounced on Monday, and today it’s trading much higher after the better-than-expected CPI data.
Will the uptrend resume?
The broad stock market index gained 1.43% yesterday, as it went the highest since last Tuesday. Last week on Monday it reversed lower after a positive ISM Services PMI reading, and on Tuesday it was as low as 3,918.39 (going down from its last week’s local high of 4,100.51).
The market will be now waiting for tomorrow’s FOMC release. It still looks like a weeks-long consolidation within an uptrend. However, last week on Tuesday the index broke below its two-month-long upward trend line, as we can see on the daily chart:
Futures Contract Rallies to New High
Let’s take a look at the hourly chart of the E-mini S&P 500 futures contract. It broke above the previous local highs on the inflation release. The support level is now at 4,050-4,100, marked by the recent resistance level.
Conclusion
Stocks are about to open much higher this morning on lower than expected consumer inflation release. So the S&P 500 index will likely get back above the 4,000 level. Tomorrow we will have the important FOMC release, and there will likely be even more volatility.
Here’s the breakdown:
- S&P 500 index got close to the 4,000 level yesterday, and today it will break above it.
- Stock prices may resume their two-month-long uptrend.
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